VIDYA SAGAR PROP. M/S FINE BRICKS CO. vs. COMMISSIONER OF INCOME TAX KARNAL

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ITA/52/2011HC Punjab & HaryanaPHHC01095765201120 April 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. The Court noted that the assessee's counsel fairly stated that an identical matter filed by the assessee had already been dismissed by the High Court in a previous order dated January 12, 2011, in ITA No. 785 of 2010 (Vidya Sagar Prop. M/s Fine Bricks Vs. Commissioner of Income Tax, Karnal). In view of this precedent, the Court held that no substantial question of law arose in the present appeal. Therefore, the appeal was dismissed without delving into the merits of the grounds raised by the assessee regarding the disallowance of expenditure on coal purchases. The operative direction was the dismissal of the appeal.

What were the facts?

The assessee, Vidya Sagar, proprietor of M/s Fine Bricks Company, filed an appeal before the High Court of Punjab and Haryana at Chandigarh against an order dated August 20, 2010, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'B'. The appeal pertains to the assessment year 2000-01. The dispute concerns the disallowance of expenditure on the purchase of coal from three parties. The ITAT had confirmed the disallowance made by the lower authorities. The assessee's counsel stated that an identical matter filed by the assessee had been dismissed by the High Court earlier.

What were the issues?

1. Whether the ITAT was justified in confirming the disallowance of expenditure on coal purchases from three parties, relying on a report concerning a different assessment year (2002-03) regarding the non-traceability of those parties, while ignoring that the assessment for 2002-03 was not set aside and the Assessing Officer (AO) had accepted the purchases as made in cash, thus not doubting the parties' existence? (Question of law and fact, concerning Section 37 of the Income Tax Act, 1961). 2. Whether the ITAT was justified in disallowing the expenditure on coal purchases based on a report dated October 4, 2004, prepared after an inquiry for the assessment year 2002-03, which was four years after the close of the year under consideration? (Question of law and fact, concerning Section 37 of the Income Tax Act, 1961). Assessee's contentions: The assessee argued that the ITAT relied on a report from a different assessment year (2002-03) to disallow purchases for the year 2000-01. The assessee also pointed out that the assessment for 2002-03 was not set aside and the AO had accepted the purchases as made in cash. Furthermore, the assessee contended that the report used for disallowance was dated October 4, 2004, which was significantly delayed from the close of the year under consideration. Revenue's contentions: The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 37

AI-generated summary — verify with the full judgment below

ITA No. 52

of 2011

-1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income Tax Appeal No.52

of 2011

Date of decision: 20.4.2011 Vidya Sagar Prop. M/s Fine Bricks Company

...Appellant Versus Commissioner of Income Tax, Karnal ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Ravi Shanker, Advocate for the appellant.

**** ADARSH KUMAR GOEL, J (

Oral)

.

1.

This Appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 against order dated 20.8.2010 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B',Chandigarh in ITA No.858/Chandi/2009, for the assessment year 2000- 01, raising following substantial questions of law:- “i) Whether the Income Tax Appellate Tribunal is justified in confirming order of authorities below disallowing the expenditure on purchase of coal from the three parties merely by relying upon the report in respect of another assessment year i.e. 2002-03 regarding non-traceability of the said parties, ignoring the fact that the assessment for that assessment year i.e. 2002-03 has not been set aside being bad in law vide order dated 21.10.2010 (Annexure P-5) and the purchases were held by the ITA No. 52

of 2011

-2- **** A.O. to have been made in cash and thus not doubting the existence of the said parties? ii) Whether the Income Tax Appellate Tribunal is justified in disallowing the expenditure on purchases of coal on the basis of report dated 4.10.2004 after conducting enquiry for completing the assessment for the assessment year 2002-03, after a long period of four years from the close of the year under consideration?”

2.

Learned counsel for the appellant fairly states that identical matter filed by the assessee has been dismissed by this Court vide order dated 12.1.2011 in ITA No.785 of 2010 Vidya Sagar Prop. M/s Fine Judge

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